Indian Institute of Management (IIM), Lucknow
Your seniors at Indian Institute of Management (IIM), Lucknow helped you with their notes. Now they're helping you with their placement interview questions. 🙏
Indian Institute of Management (IIM), Lucknow
Your seniors at Indian Institute of Management (IIM), Lucknow helped you with their notes. Now they're helping you with their placement interview questions. 🙏
I applied via Campus Placement
Client is a hospitality chain with properties in Chennai and Kolkata. The chain has been operational for the past 40 years. Due to Covid-19, the chain has witnessed a drop in number of hotel bookings leading to a capacity utilization of 50- 55% which is below the normal level of 60-70% that the chain expects. Keeping in mind the effect of the pandemic, help them in formulating a strategy to improve their capacity utilization.
[Please note that I stands for Interviewer and C stands for Candidate]
C: Does the client have any operational or budgetary constraints? Do we have any specific timeline or metrics in place to evaluate any strategic option?
I: The client does not have any operational and budget constraints. However, the client would like to see improvement in utilization to the normal levels of around 60-70%.
C: Okay. Can you tell me a bit about the hotels that the client operates, how many hotels the client has in each city, what kind of services are offered?
I: Sure, the client has 2-3 hotels in Chennai and 2 in Kolkata. All the client properties are 5-star hotels under the same brand. The hotels offer a full range of services that would be expected in a normal premium hotel.
C: Can you tell me about the kind of customers who visit the hotel?
I: 70% of the customers for the hotel are business travelers, rest of 30% are primarily foreign tourists.
C: I am assuming that the decrease in the number of customers would be across the two major customer segments. Business travel might have decreased due to increased prevalence of virtual ways of working. Tourism sector has taken a hit which might have resulted in a reduction in the number of visitors coming to the hotel.
I: That is correct. The decline has been across both the customer segments.
C: The utilization of rooms in a hotel is dependent on price. In order to increase utilization, we can look at decreasing the prices. However, such an option can led to dilution of premium image of the hotel. Also, the price elasticity might be very low considering the kind of customers that the hotel caters to.
I: Yes, lowering the prices is not an option.
C: Is the hotel following dynamic pricing?
I: Okay, this can be one option that can be looked at. What else can the client do?
I would like to look at the issue of increasing utilization from two perspectives, one would be to look at ways to increase the hotel bookings by the current Target Group and the second would be to look at ways to attract different set of consumers to the hotel.
I: Let us look at different customer segments that can be attracted by the hotel.
C: We can divide customers into two groups primarily: Business Customers and Non-Business Customers.
I: Let us look at the business customers.
C: For the business customers we can further divide these according to the needs that the hotel can serve. Historically, majority of the business customers would be those staying at the hotel for 2-3 days while being on a corporate visit. Apart from this, the hotel can be used to organize corporate events or industry conferences, conventions etc.
I: Okay, let us look at the non-business customer segment.
C: The non-business customers can be divided into three major buckets: First, tourists or travelers which will include both domestic and foreign. Second, people who come for weddings, art exhibitions or other cultural events and third, people who come to the hotel for dining or entertainment purposes.
I: Okay, now that we have identified different kinds of customers: can you tell me which of these customer segments should be targeted?
C: The number of business customers will remain low as a lot of companies are starting to adapt to a virtual workplace setup. The hotel premises can be optimized for hosting weddings and other cultural events, but this segment will not really grow significantly in size in the future. I would focus on tourist segment of customers which would be expected to increase once the effects of Covid-19 subside.
I: Fine. How would you go about ensuring that this new segment of customers goes for our client’s hotels?
C: We can break down the issue into 4 aspects: Customer Need, Promotion, Accessibility and Service Experience.
I: Can you elaborate on these?
C: Sure, starting with the customer's need. Over the world, tourists seem to be attracted by the value proposition of hotels that give them a flavor of the local culture and lifestyles.
Kolkata and Chennai are two cities that are rich in their heritage and the hotels that our clients have can be shaped to reflect the cultural heritage of these cities. On top of this, tourists prefer authentic experiences and hotels which are technologically advanced.
We can have a different sub-brand for properties offering this new value proposition.
I: This seems fair. What about the other aspects?
C: Under promotion, we need to ensure that our advertising is consistent with the new proposition in terms of the message and the media on which we promote the client’s hotel brands.
Digital presence can be optimized using SEO and digital analytics can be used to target high propensity customers. Under accessibility, we need to ensure that our hotel is listed on all the major OTAs such as Expedia along with optimizing our own website.
The service experience needs to reflect the new value proposition and changes would be required in terms of tangibles, employees, and the ambience.
Our client is a 2-wheeler manufacturer based out of India for the past 35 years. In the past 3 years, it has witnessed a drop in market share from 20% to 15% and drop in EBITDA from 18% to 13%. Help the client.
[Please note that I stands for Interviewer and C stands for Candidate]
C: Can you tell me about the scale of operations of the client in terms of geography and the distribution channels of the client? What is the current capacity under which it is operating?
I: The client is a Pan-India player operating at 85% capacity. It has a 3rd party distribution and dealer network.
C: Can you talk about the kind of vehicles that the client manufactures? How many different SKUs does the client have?
I: The client manufactures motorcycles in the mid-price segment and has 5 different SKUs.
C: I am assuming the client would be catering to the middle–income segment.
I: Yes, that is a fair assumption.
C: Can you tell me about the competition faced by our client? Are they facing a similar issue in terms of the drop in EBITDA?
I: There are 4 major competitors including 2 emerging players who have taken the bulk of the market share that we have lost. The competitors have not seen a drop in their EBITDA margins.
C: I would like to focus upon the market share issue first. Is the market share in terms of volume or value?
I: It is in terms of value.
C: The market share decline in this can be due to two factors: First, the market share of the higher-priced segments in which our client does not operate has increased at the expense of mid-price segment. Second, our own share within the mid-price segment has decreased.
I: It is a case of both. Let me give you some data:
Segment: Premium
Share: 10
Price Range: >95000
Growth Rate: 30%
Segment: High
Share: 20
Price Range: 65000: 95000
Growth Rate: 25%
Segment: Mid
Share: 35
Price Range: 40000: 65000
Growth Rate:12%
Segment: Low
Share: 35
Price Range: <40000
Growth Rate:15%
C: The mid-price segment has grown at a below average rate of 12% which is one of the reasons for the falling market share of our client.
I: Can we do something about this?
C: Probably enter a new segment.
I: Let us say the client is confused between low and high segment, which one should he choose?
C: It will depend on 4 factors: Size and growth of the segments, profit margin in each segment, level of competition within each segment, client’s expected segment share in each segment.
I: Looking at the numbers that I provided, where do you see greater potential?
C: The high-priced segment is more attractive due to its superior growth rate. Keeping the macro-economic trends in mind, this segment will remain highly lucrative for the future. Also, it might be possible for us to upsell the existing customer base.
I: Seems right, the client has also faced declining share within the mid-priced segment. Can we explore what could be the possibilities in this case?
C: Sure, it can be a function of prices and volume of motorcycles sold. Do you want me to look at any one issue in particular?
I: Let us focus on quantity.
C: The quantity can be constrained at either the supply side, at the dealer stage or at the customer end. I am assuming that since we are running at below capacity at 85%, supply side is not an issue.
I: Yes, leave the supply side. Let us look at the dealers first. What could be the possible issues?
C: There could be two levels of issues: The first could be that the number of customers visiting the dealers themselves has decreased due to some factors such as alternate D2C channels or other dealers in the area. The second could be that the dealer is not pushing our product due to a lack of monetary or non-monetary incentives.
I: What can be done about incentives assuming we cannot increase prices or reduce the client margins?
C: Increase the margins for our dealers. We can use our excess capacity to reduce fixed cost per unit leading to a lower overall cost which can result in higher margins for the dealers assuming we do not pass the benefit to the consumers. The other option could be to offer attractive credit support to the dealers.
I: Okay, let us move on to the issue of customer demand. What could be the possible issues here?
C: We can look at 4 things here: Customer Need, Promotion, Purchase and Post-Purchase. For the first issue, Customer Need, do we have some data on how the client products fare against our competitors in terms of Performance, Features and Durability?
I: The product is competitive in these aspects. Do you think the client can introduce a greater number of SKUs?
C: It depends on how heterogeneous the customer segment is. If it is not heterogeneous, an increase in the number of SKUs will lead to an increase in operational costs with no substantial increase in revenues resulting in lower profits.
I: Seems fair. Let us look at the other issues.
C: Yes, assuming that the product is suited to the customer needs, we can look at Promotion which includes both Push-based and Pull-based promotion. Pull-based promotion will consist of advertising and use of digital marketing to ensure that the client product is within the Initial Consideration Set for the customer. The Purchase experience needs to be seamless and the availability of affordable payment options such as EMIs is extremely important. The Post-Purchase aspect consists of servicing/maintenance, warranties and response to customer feedback.
Devise a Go-To-Market Strategy for a smart watch manufacturer.
[Please note that I stands for Interviewer and C stands for Candidate]
C: What is the objective behind this move? Does Titan have any budgetary or operational constraints?
I: The share of conventional watches is stagnating, and the client expects huge potential for the smartwatch as an upcoming segment. The objective is to increase market share. There are no budgetary or operational constraints.
C: What is the price range in which its Titan is planning to launch the product.
I: There are two segments that we are looking at: Rs 5K-10K and Rs 10K-20K.
C: Who are the current major players in the smart watch market? What are their current shares?
I: The major players are Apple, Xiaomi and Samsung. The smart watch segment is still in the growth phase.
C: Sure, we can look at any GTM strategy in terms of 4 aspects: Customer TG, Product, Promotions and Distribution/Retail Channels.
I: Let us look at customers. How do we define them?
C: We can define the customers by looking at the needs that a smartwatch can cater to. These needs can be divided into two broad aspects: Functional and Psychological.
I: What will come under each of those broad aspects?
C: Functional needs would include Fitness tracking and Health monitoring, Environment Sensing, Sync capabilities with other devices and Smart Home applications. Psychological needs would include aspects such as Social Status, desire to be seen as cool for having a high-tech product of a brand such as Apple.
I: How do we go forward from here?
C: We need to decide which one of these different needs is going to lead to a significant customer segment. Do we have any data on this?
I: No.
C: I feel that among the functional needs, fitness is going to be a major driver. We can target this segment.
I: How do we define and target such a segment?
C: The customer segment can be largely described in terms of demographics and geography as most technologically oriented fitness-conscious people would be of a younger age group. Use of online channels for promotion and use of e-commerce platforms as well as D2C channels for distribution would be critical to reaching this customer segment. One way to increase the penetration would be to have tie-ups with certain fitness-based apps such as CultFit.
I: How can we ensure that our client gets a decent market share in this segment?
C: One major aspect in this segment would be the ecosystem effect: the greater the number of smart devices that can be connected to the watch, the greater would be its utility. The second major aspect would be the brand image, and this is where competitors such as Apple have an edge over our client due to their technological prowess.
I: But our client also has some complementary assets such as its retail stores like Croma and appliance brands like Voltas.
C: Yes, and it can also leverage some expertise in software from TCS. In addition, the Titan might be the only Indian brand in the segment giving it a unique advantage over others in this regard.
I: How should our client compete against its competitors, on what basis: Brand or Product?
C: The brand of competitors like Apple, Xiaomi and Samsung is too strong to be countered by Titan which is new in this segment. In such a situation, it is always better to compete for product superiority.
I: Interesting. If I were to estimate the size of the smart watches market, how would I do?
C: I would like to use a top-down approach. We can start with India’s population. (I proceeded to use factors in the order: Rural/Urban -> Economic Classification -> Age profile -> Propensity to purchase smart watch. I also mentioned the replacement period).
I: What are the factors that can affect the replacement period?
C: Economic prosperity leading to an upgrade in model, Technological Obsolescence, Desire to own new features and aspiration to own a smart watch from a well-known brand.
I applied via Campus Placement
A film producer decides to release a movie through reviews from a pre-release that had a limited audience.
The pre-release costs Rs. 1 crore. A hit movie would earn Rs. 200 Cr and a flop movie would earn Rs. 50 Cr. There's a 50-50 chance that the audience gives a thumbs up or thumbs down to a movie.
If the audience gives a thumbs up, there's 80% probability that the movie would be a hit and 20% that the movie would be a flop and 40% & 60% respectively if the audience gives a thumbs down. It costed Rs. 10 Cr to produce the movie.
Suggest the most profitable option to the producer.
I solved the case through the decision tree method where I created several branches considering all the situations.
Further, I calculated success probability and total earnings for each option to suggest the most profitable way.
The client wants to invest in a business that installs telecom towers. How can they decide if they should invest or not?
I solved this case using a mix of market entry and growth strategy frameworks and highlighted the metrics I would recommend the client to look at to come to their final decision.
Analyze if you should invest in Paytm's IPO?
Puzzle - You have two eggs, and when one is thrown, it'll get broken only if dropped from above a certain floor level. What is the max floor number from which the egg can be thrown such that it doesn't break?
I applied via Campus Placement
Client is the owner of a Research Institute and wants you to estimate the number of sport scientists that he can potentially interview for the position.
[Please note that I stands for Interviewer and C stands for Candidate]
C: So, the skills that we’d be looking for would be a combination of nutrition/ medicine and physical education. Would that be correct?
I: Yes, the candidate should have knowledge of nutrition, biomechanics, recovery, physical activity etc.
C: Okay. I would like to divide this estimate in 2 parts. First- I’d like to estimate the potential number of candidates who have graduated recently, Next- I’d like to estimate the candidates who are already working in similar roles. Does that sound fair?
For estimating the number of recent graduates who can be our potential candidates, I’d like to first estimate the number of people who would have taken Biology and Physical Education as their subjects in class 12.
For reaching this number, I’d like to start with the total population of the country divide it into rural and urban. I would ignore the rural population as this is a relatively niche field.
I: Here he interrupted me to tell me that this approach is very broad, and we can’t possibly reach the solution this way.
C: Got it! So, if we know that approximately 10 lakh people sit for engineering entrance exams each year, we can take a factor of double that i.e., each year ~20 lakh people are looking to join graduate colleges.
I: This is fine. But this approach is similar to the one you used before. (This gave me the clue that he wants me to use the supply side approach).
C: Okay, we can try and estimate the number of colleges in the country and see the colleges that would have these subjects e.g., medical/ home science colleges.
I: Yes, Good. How would you estimate that?
C: We know in India there are state universities and central universities so we can proceed with that.
There are 30 states in India. We can assume that each state has at least 10 medical colleges. So, we get 300 medical colleges. We can multiply this by a factor of 1.5 to incorporate other home science and colleges of the related field.
Now, in these 450 colleges we can assume that there are 1500 students on average. This gives us a pool of ~650000 students. Of these 650000 students, we can assume that 50% go into pure sciences (medicine) 30% go for PHD/ other higher education and 20% want to change their field.
This gives us 130000 students. Out of these we need students who have the combination of skill set that we are looking for (knowledge of nutrition and body mechanics).
Since these are niche subjects, we can take a factor of 0.2 to get to our potential pool of graduate candidates which is 26000 candidates.
Now we can move to the second part of the guesstimate which is number of people who are already working in some related vocation.
For estimating the number of people who are in a similar vocation, I would first define the type of vocations. So, we can have people who are currently in the sports industry working as physiotherapists etc.
We can have dance trainers and gym enthusiasts as one category, The next category would be freelancers like dietitians etc. The last category would be ‘others’ primarily comprising of those graduates who had opted for research roles after their graduation and now want to return to the industry.
First we estimate the number of potential candidates in the sporting industry.
Let’s assume there are 16 IPL teams, each of these teams would have 10 people with the required skillset. Let’s say there are 20 such sports and leagues. We get a pool of 3200.
I applied via Campus Placement
Your client is a large FMCG company, and you are speaking to their supply chain head. This is post COVID second wave and he wants you to suggest some interesting things that they can do with their supply chain.
[Please note that I stands for Interviewer and C stands for Candidate]
C: Started with asking about the business, geography etc. but was interrupted.
I: Assume it to be similar to Unilever. I don't want more questions, tell me how you would approach such a question.
C: Sure, I'd start by looking at their value chain, starting from R&D, forecasting, raw material acquisition, logistics, manufacturing, distribution, sellers, after sales activities.
I: Great, now what are the few main things you would want to know before evaluating?
C: I would want to know more about the network that the company has, how they handled the 1st wave of COVID and how those changes helped with the second wave.
I: They have 100 suppliers, 50% of the material is imported, 25 plants pan India, 3000+ distributors. During COVID, the plants were shut down for 2 months, and the whole supply network was shut as well. Manpower was reduced. Later, warehouses were increased to stock more, increased inventory days. So, let's look at forecasting and logistics. Let's start with forecasting.
C: Sure. When looking at the forecasting efforts I would look at it from a business and technical perspective. On the business end, the demand and supply would be coordinated. On the technical front, I would look at the kind of tools we have been using and if there is a scope for an upgrade.
I: Which tools?
C: Advanced analytics, machine learning, IoT etc.
I: How can IoT help?
C: It can provide some real time data, can help us identify consumer spending patterns, store traffic, improving communication between distributors and retailers.
I: Great. Let's move to logistics. Suppose the diesel price has doubled and the transporters are asking for double the money we used to pay them. What should we do then?
Data:
• Initial Cost of Diesel: 50/L
• Truck runs 200 Km/day, 25 days a month
• FC: 60,000/month
• VC: (2+price of diesel) per Km
C. Since there are fixed costs, the transporter is obviously not facing double the costs. To calculate the proper rise in costs, can I also get the number for mileage?
I: 5 Km/L
C: Initial cost = 60000 + [2*200 + (200/5)*50]*25 = 1,20,000
New cost = 60000 + [2*200 + (200/5)*100]*25 = 1,70,000
Percent change = 50000/120000*100 = 41%
The actual rise is 41%. Do we want to compensate them exactly or do we want to negotiate?
I: No, we want to be fair. Can you explain the methodology?
C: Explained my calculations step by step.
I applied via Campus Placement
You have been approached by the CEO of a gym chain, currently having 5-6 outlets in India.
Due to COVID, they are experiencing lower footfall, with their revenues falling. You have been hired to help the company adapt to the new normal.
[Please note that I stands for Interviewer and C stands for Candidate]
[The flow was conversational. It started with calculating revenue numbers, explored various streams of revenue and potential areas of improvement. Concluded the case with recommendations for increased subscription and retention]
C: Started with asking questions about the location of the gym, capacity, target customer segment (Low, medium or high-income brackets)
I: Location: Metro cities; capacity: 50 people; Income bracket: Medium to high.
C: What are the services currently provided by them apart from gym equipment and professional trainer? Do they have planned alternate sessions on say, Yoga or Zumba as well?
I: No, just traditional gym facilities.
C: Since we are considering the covid era, were there any restrictions imposed by the state/central government?
I: Yes, strict regulations on sanitization, temperature check and 50% capacity utilization were imposed. All of which has been duly obliged by the chain.
C: What was the fall in revenue and was the decline evident before Covid or sudden due to Covid restrictions?
I: The decline was sudden. Let me provide you with some case facts to better evaluate the situation. Current revenue: 10,000 per customer per month, average capacity utilization pre covid 80% and post covid 10%.
C: Based on the data, pre-covid revenue: 10,000*12*50*0.8*5 = Rs 24 crore across 5 outlets.
Post-covid: 10,000*12*50*0.1*5 = Rs 30 lakhs i.e., 85-90% fall in revenue.
For our analysis, should we also consider the cost aspect as some of the trainers may not be full time employees or were laid-off due to low footfall at the gym?
I: Assume all trainer to be full-time employees and no lay-off as it was against the company policy. We can focus only on the revenue aspect for now.
C: Since they have a traditional setup, can we explore potential avenues for revenue generation?
Gym has 2 targets currently, to acquire new customers and retain existing ones.
Recommendations to address both are:
• Starting transport facility: pickup and drop facility from home to gym
• Invite celebrity star to the gym and use social media handles to promote assurance and safety in opting for their services
• Personal reminder and motivation calls from trainers
• Develop online platform like Cult fitness and offer services like Yoga, Zumba and Mindful meditation sessions
• In-house restaurant: providing healthy food alternatives
I applied via Campus Placement
Case 1: Guesstimate the amount of cash withdrawn from an ATM in a day in BITS' Pilani campus.
[Please note that I stands for Interviewer and C stands for Candidate]
[The original case was to estimate the money withdrawn from an ATM in a day at IIM-L but was changed since I had never been to campus. A few facts to be known about Pilani before we start: The population of Pilani is very low, and a huge chunk of the town’s population is students of BITS. There is only 1 ATM on campus (ICICI Bank): This question was asked to I in his interview at IIM-C]
C: Great! Wanted to clarify a few things: Are we speaking about a Covid scenario? Also, since BITS is a college campus, I wanted to understand whether we are speaking about any particular time period: vacations/ or should we consider it to be a time period during the semester?
I: Let’s take a pre-Covid scenario and you can consider that all students are on campus.
C: Great! I’d also like to know whether I should consider a normal day: i.e., no festival/ college event etc.? and whether we are looking at a weekday or a weekend as trends might be slightly different.
I: Consider a normal day on campus, and if there are any other factors you would like to scope, feel free to make assumptions and state them.
C: Awesome. There are two ways to approach this problem: First, we can look at the traffic at the ATM, and try to guesstimate the daily volume by analyzing the number of transactions and their ticket size.
I’d like to take a second approach though, i.e., estimate the total cash spent on campus/ by the campus population in a month. I’d then try to figure out how much of that cash is withdrawn from the ATM on campus and get a daily value by dividing by the no. of days in a month. Does that seem like a fair approach?
I: Sounds good. Let’s proceed.
C: There are two sets of people who would withdraw money from the ATM.
Those residing on campus and those residing outside campus.
Those residing on campus would be students, faculty and support staff, and restaurant and shop owners who transact heavily in cash. Those from outside campus, would be residents of Pilani who would come to withdraw cash from the ATM because there is no other ICICI ATM in the town.
There would also be speakers/ guests visiting the campus, and a small set of other people. For the sake of this discussion, I wouldn’t consider the last 2 cohorts of people as their relative size would be very small.
Does this breakdown seem fair and is there a particular cohort you would like me to analyse first?
I: Fair. Let’s proceed: choose any cohort you would like to analyze further.
C: Sure, let me start with students. I would break them down year-wise and also break them on the basis of low and high spending capacity. I would factor in whether someone’s family had to take a loan to fund the education as a proxy for whether someone would have a low or high spending capacity.
1st, 2nd and 3rd year students would have a certain spending habit. I would estimate this at a low and high level. 4th year students (since they have savings from a 6-month internship) and master’s students would have higher spending patterns, so I would take in different multiplier factors over the base numbers to estimate their spends.
I: Sounds good.
C: I would now break down the spends into major buckets: Food, travel, utilities, stationery & merchandise, alcohol & cigarettes, and luxury spends/ indulgences.
[Broke down the values: also mentioned that most students budget their expenditure, so the individual breakdown didn’t matter as much as the total value.
Used my personal budget and spending patterns as a benchmark. Used a friend’s spending patterns as a benchmark for the other spending capacity cohort]
C: There is one major difference now though, from when this question was asked to you during your interview. BITS has an ID card system, where a lot of Food, travel, and merchandise spends are loaded onto the ID card and paid at the end of the semester, thus
requiring no cash.
Furthermore, a lot of tuck shops also use Paytm/UPI. So, I would factor in cash transactions as a percentage of total spend for each of the buckets.
[Broke down numbers: Gave a rough figure for students]
Case 2: Chelsea Football Club is entering the Indian market: list down the possible revenue streams and then analyze some nuances it must consider while making an entry (Market Entry + Growth Strategy Case)
[Please note that I stands for Interviewer and C stands for Candidate]
C: I want to confirm whether we are speaking of CFC as a brand, or as a football team trying to enter India over here.
I: We want to analyze revenue streams for CFC as a brand.
C: Sure. CFC already exists in India, should I assume a hypothetical situation where the brand has not yet entered the market, or should I try to drive growth for the current operations.
I also want to understand the objective are we looking at profit/ revenue maximization or are we looking to use this entry to increase our fan base. I’d also like to understand timelines and constraints.
I: You can consider a hypothetical situation, though let’s try to first list down all possible revenue streams. The objective is profit maximization and let’s not think about timelines and constraints at the moment. If there are any more questions, feel free to make assumptions and state them.
C: Sure. I would break down the revenue streams into two parts: Those coming from core football operations and those coming from other operations. Non-football operations would majorly be:
1. Merchandise (jerseys, bobbleheads, signed memorabilia, partnerships with other brands etc.)
2. Events (trophy tours, meet the legends, fan meet-ups etc.)
3. Fan Clubs
4. Infrastructure (e.g., The Chelsea Pub: sports bars for screening/ fan meets etc.)
5. Sell Exclusivity (e.g., pay for featuring on our social media handle, paid subscription on the Chelsea 5th stand app to get exclusive benefits)
6. Partnerships would be an overlapping bucket, and we could boost revenue streams by partnering with other brands.
Football led operations would be:
1. Host tournaments
2. Partner with a local club
3. Training players: Coaching/ Chelsea Academy
4. Training coaches: Certification courses etc.
[The idea generation process was conversational in nature: I laid down my L2 and L3 structures and we discussed a bit on the points that I found interesting/ wanted to probe on as I proceeded. We had a fair bit of discussion on selling exclusivity. I mentioned that I had featured on the club’s official page for free, because I had a friend handling their social media account, but I would gladly pay a bit for the same. I also, constantly benchmarked v/s Arsenal and Manchester United, both of whom had a good brand presence in India].
I: Sounds good. Now assume that the club is entering the market. What are a few things you think your client should consider before entering?
C: [Scoped a bit on what the I exactly wanted: He was looking at whether I could identify nuances in the business, especially specific to football]. Great: so, I think since Chelsea is a European club it should consider the following:
1. When entering the football operations, the positioning and brand image considerations should be clear. Would the coaches be European?
If yes, how do we handle the country change process from an HR and cost perspective. If not, how do we maintain Chelsea’s brand image if Indians will be coaching students under the CFC brand. What would certification criteria be? Are we looking at a direct strategy or a franchise model?
2. The mindset of European consumers and Indians is very different. Pricing merchandise in India would be challenging, and we would have to know whether we are targeting volume or margins.
Indians have a variety of good options in the black market. I’ve been a Chelsea fan myself and have more than 10 jerseys spanning over a decade but only 2 of them are original. The counterfeits are of great quality and range between 5%-25% of the cost of an original.
3. While we are looking at revenue streams, I would also like to analyze long term customer LTV. New fans would mean increased broadcasting revenue shares and we should factor this into feasibility calculations.
I applied via Campus Placement
Client is an Indonesian food delivery startup, like Swiggy and Zomato. It is a market leader in South Asia. Now it wants to enter India. Chart out a Market Entry strategy.
[Please note that I stands for Interviewer and C stands for Candidate]
C: Before starting with the analysis, I have some clarifying questions that I would like to ask.
I: Sure, go ahead.
C: I see that the client wants to enter India, is there specific purpose for this move?
I: Yes, the purpose is growth.
C: Okay. Fair enough. And how can we help our client here?
I: The client would like to know if we will be able to make unit economic profit in India.
C: Sure. I would love to help him with the best of my abilities. (Understood about the company, its USP and specifics about the revenue model, consumer, and competitors. Applied PESTLE to understand market attractiveness. I was asked to focus on unit economic profit and profit is function of revenue and cost. Therefore, I decided to deal with revenue and cost separately).
C: We can do a market estimate to determine potential unit revenue. (The major revenue streams considered were delivery charges and commissions from restaurants. After a detailed discussion, the interviewer asked me to consider 20% of bill value as commission and 25 Rupees as delivery fee. We also talked a little bit about the recent hike in delivery fee by Swiggy and Zomato. I finished the market estimation and the Interviewer nodded in approval after hearing the final number. Then we moved to cost analysis).
I: What type of costs would you consider while doing cost analysis?
C: For unit cost, I would like to focus on labor cost and fuel cost.
I: You can ignore fuel cost for now. How would you go about the labor cost?
C: We have calculated total demand in the guesstimate. From there, we can compute the total number of delivery persons by dividing demand by total number of orders per driver per day. Total number of orders per driver in a day can be found by incorporating peak and non-peak hours.
I: You can continue with this approach.
(I calculated the total number of delivery persons which came out to be a reasonable number.)
C: Do we have any information about the salary given to delivery persons?
(The Interviewer gave me an average salary paid to a delivery person. After doing necessary calculations, I found that the company will incur losses if it enters Indian market.)
Let us begin our case. Client has a diagnostic lab, one of the largest in the world. He wishes to get a good assessment of market in India.
[Please note that I stands for Interviewer and C stands for Candidate]
C: The client wants to enter the Indian market, I presume.
I: That is correct.
C: Before we start, I would like to ask some clarifying questions.
I: Sure, go ahead.
C: What kind of operations does the lab undertake? Does it specialize in certain areas or is it a general-purpose health lab?
I: It is a general-purpose health laboratory. It conducts 2 types of tests – Prevention tests and tests prescribed by doctors.
C: Okay. And what is the nature of technology used in these labs?
I: It is a high-end laboratory; they use the latest technology.
C: To assess the market, we can look into the potential revenue generated from these tests. I would like to analyze Prevention tests and Prescribed tests separately.
I: We can focus on the prescribed tests for the time being.
C: Sure. Since we are talking about one of the largest companies, do we have any data available on the proportion of revenue generated by prescribed tests.
I: Yes, the past data shows that prescribed tests form 80% of the revenues for the company.
C: That is great. That means analyzing the potential revenue from prescribed tests may give us a good idea about the Indian market!
I: That is correct!
C: For prescribed tests, we can analyze the market India possesses by dividing it into urban and rural areas. Rural areas have a huge scope, mainly because of two reasons. First, high percentage of population residing in rural areas. Second, rural healthcare has seen huge investments coming in in the past few years. However, there are some issues about operating a high-end laboratory chain in rural areas.
I: And what are these issues?
C: To start with, currently, there are very a smaller number of functional hospitals in rural areas. That means the number of doctors prescribing the tests would be much less than in urban areas. In addition to this, the sourcing of laboratory equipment and medical supplies would need a well-developed road connectivity. These facilities may be available in rural areas in future, say, in the next 10-15 years? However, if we are assessing the current Indian market, we can ignore rural areas.
I: Good analysis. Let us focus on urban areas.
C: Great! When we are talking about prescribed tests, we mean the tests prescribed to patients by doctors in case the former needs the test to be performed, is that correct? I mean, here we are considering all doctors, working at hospitals or clinics.
I: Yes. You have got it right!
C: Okay. We can do a guesstimate to find the number of doctors in urban areas.
I: No need to delve into that. You can assume that the number of doctors is 0.7 per people pan India.
C: Thank you! That will make the calculation much easier. We know that the current population of India is around 1.3 billion people. Using the data, you just provided, it seems like there are around 9.1 lakh doctors all over India. As number of doctors in urban areas are much more than in rural areas, we can safely say that around 60% of the doctors are working in cities.
I: That is a reasonable assumption. And how many of them would be eligible to prescribe laboratory tests?
C: I believe a huge percentage of urban doctors in India would be eligible to prescribe laboratory tests. Let us say, around 60% doctors fulfil this criterion. The final number comes out to be around 3.3 lakh doctors.
I: Good work. The number seems to be fair. How would you calculate revenue from this number? (This was followed by a discussion on average number of patients attended by a doctor in a day, the number of tests prescribed per day and an average cost of these tests in India. Both Interviewer and I were picking instances from day-to-day life to back our values. We came to an agreement that on an average a doctor prescribes 8 tests in a day with an average cost of 100 Rupees per test.)
C: From this data, the revenue derived from prescribed tests per day is around 24 crores. Say, the laboratory is open 300 days a year, the net revenue per year comes out to be 7200 crores. I presume that the client would require the potential revenue in USD.
I: That is correct. You can do the necessary conversion.
C: Taking the current conversion rate as 1 USD = 72 Rupees, the potential revenue derived from prescribed tests is around 1 Billion dollars. Do we have any data on the present revenue generated by the laboratory chain?
I: Sure, it generates around 7 Billion dollars a year. What do you think, should the client enter the Indian market?
C: India has always been a huge market for healthcare sector. A market with a potential revenue capacity of 1 Billion is an attractive option. It would also result in 14% increase in the global revenue. Moreover, this market is growing at a fast pace of 20% in India. I believe the client should consider this option. (Always back your opinion with number and current scenarios.)
I: Very well. A comprehensive analysis overall. We can close the case now. Thank you.
Let us take a small case. Client is the CEO of PVR Cinemas. Help him in understanding the unit revenue of PVR Setup.
[Please note that I stands for Interviewer and C stands for Candidate]
C: The revenue stream would include revenue from tickets, food and beverages, and advertisements shown before the movie or during the interval.
I: That seems right.
C: The size of a PVR Setup may vary with the size of the city/town it is being introduced in. Are we talking about a PVR Setup in a metropolitan area?
I: That is correct.
C: Okay. A general PVR Setup in a metropolitan area has 4 screens. Each screen has a capacity of 150 people. The price varies from place to place but we can take an average of around 100 Rupees. Do these assumptions seem valid?
I: The numbers seem fair. You can move forward with these values.
C: Thank you. The next step would be to calculate revenue generated from screenings.
I: And how would you go about that?
C: We can use the simple relation that revenue generated per show will be equal to (average number of screens) *(Percentage occupancy) *(average price of each ticket). (It was followed by a detailed discussion on how we would calculate percentage occupancy as it will depend on various factors like - day of the week, any new release, holidays, festivals etc.)
I: You can take an average percentage occupancy of 60%.
C: That is great! So, the number comes out to be around 150*0.6*100*4 = 36000 Rupees per show. We can multiply it by number of shows in a day. (We discussed the various factors to incorporate while calculating the number of shows. I was coming up with values based on my experience. For example, the length of English movies is around 1.5-2 hours whereas Hindi movies are generally of 2.5-3 hours. Further, around 20-30 minutes are allotted between the shows to clean the theatre and allow people to settle in for the next show.)
C: We can take the average length of movie as 2.5 hours. As per my experience, PVR Cinemas are generally operational for 14 hours in a day. Also, around 20 minutes break is given between shows for cleaning. After taking all this into account, we can say that around 5 shows are run on each screen in a PVR Setup. That means, in total, around 20 movies are shown in a day in a PVR Setup.
I: That seems fairly accurate. No need to calculate the final revenue. We can close the case here.
I applied via Campus Placement
1. A financial firm which uses old legacy applications is growing rapidly, you must recommend a cloud migration strategy, how would you go about it?
2. Guesstimate: Estimate the total number of videos on YouTube.
[Please note that I stands for Interviewer and C stands for Candidate]
I: A financial firm which uses old legacy applications is growing rapidly, you must recommend a cloud migration strategy, how would you go about it?
C: There are 2 aspects to this, firstly an analysis of the current systems and communicating the benefits of cloud migration to the client. Secondly, the actual strategy around how would we go about the migration. Which aspects do you want me to focus on?
I: Let us focus on the benefits part, what all benefits will you communicate to the client? Give a top-level overview.
C: The benefits that the clients get include easier, faster, and cost-effective scalability since the firm was growing. In addition to this, better security features provided by cloud service providers. The client will have cost-saving in terms of having the ability to dynamically demand server resources with pay as you use pricing models.
I: Let us move on to a guesstimate Estimate the total number of videos on YouTube.
C: There are 2 bn YouTube users currently. I would like to assume that the content creators to content consumers ratio of 1:10000 based on my assumptions. Can I go ahead with this assumption?
I: Yes, you may proceed.
C: I would further like to break down the content creators into 3 segments based on frequency of video uploads as high frequency, middle frequency, low frequency content creators (10%, 20%, 70%). Then estimated high frequency uploads around (1500 videos a month - example would be news channels), middle frequency (100 videos a month - example would be coaching class channels), low frequency (10 videos a month).
I: Very good, go on.
C: For the total number, since YouTube was started in 2005, I would assume a base number x and an average year on year growth percentage and equate it to the 2019 figure obtained. This will help me find the total number.
I: No need to estimate for the entire duration, 2019 is enough. How would you go about it if you did not know the 2 bn figure of user base?
C: I would estimate the userbase for India by segment based on internet penetration in urban and rural segments and then age groups and get to a number, extrapolate that to the world population considering some valid assumptions.
What are the benefits of cloud migration, challenges to be considered and planning required as part of the cloud migration strategy?
I listed down some major factors to be considered for the adoption of cloud computing as Internet connectivity, Internet speed, availability, reliability, data storage location, security, data sovereignty, cost, integration, data backup, provider dependability, employees’ knowledge, and transportability.
Further, I discussed the migration strategy as to which systems to prioritize first, how to decide what upgradations might be required, how to group systems for migration, when to do the migration (as this would involve a downtime), can the downtime be avoided, data transfer costs as a major barrier.
I applied via Campus Placement
A niche tech company based out of Gurgaon has been growing at a CAGR of 20-25% for the past five years. For the last year, they are struggling to fill the positions in the company. It is taking more time to fill the positions as compared to earlier. Please help them.
[Please note that I stands for Interviewer and C stands for Candidate]
C: May I know what technology does the company operates?
I: The company is a software developing company. It also develops android apps for its client.
C: May I know from which country do we have our majority client base?
I: How does that matter?
C: I would like to know whether the employees have to take night shifts if our client base is from the USA or European countries.
I: Our clients are majorly from the US. But we do not have to take shifts. Just weekly calls.
C: Thank you. And may I know which companies are our competitors?
I: No companies. Since we work on niche technology.
C: Should I include the COVID-19 scenario?
I: No. This is happening in 2017.
C: Okay. I would like to approach this case in the following formats— internal and external factors.
I: Okay, go ahead.
C: In the internal factors, I would like to consider factors such as work culture, work-life balance, HR, facilities, Talent acquisition team, Training, and recent changes.
I: Alright.
C: In the external factors, I will include the overall economy, skills required, and Rules and regulations from the govt.
I: Okay, please go ahead.
C: What is the culture of the company? Is it still working as a startup or matured into a big company?
I: It is in the transition phase.
C: Okay, thank you. May I know on average how many hours employees have to work in the company per day?
I: It depends. Sometimes less. When there are project deadlines, employees may have to chip in some additional work hours as it is for every other organization.
C: Okay, thank you. May I know about the HR regulations on a team outing, bonding, or any other cultural events? Also, may I know the facilities offered by us to employees such as gym, swimming pool, etc.?
I: All of it is the same as any other software company, like Infosys.
C: I believe we have two types of employee intake - freshers from universities as well as Lateral entries from other companies.
I: Yes, that is correct.
C: Are we seeing any drop in any of them? Also, may I know some details about the talent acquisition team? Are they well trained for this activity?
I: Drop in both of them. And yes, they are qualified.
C: Do we have enough universities that teach our required skill set? Do we visit all of them?
I: Yes, to both the questions.
C: Okay. Did we witness any change in the leadership of the company recently?
I: No.
C: I believe this is not due to internal factors. Can I move ahead to external factors?
I: Vaisakh, I think we are wasting a lot of time. Just tell me what all are the things (metrics/ numbers) you look at initially when you hear such a problem?
C: I would look into the difference of the days required to fill the positions now compared to one year before.
I: Now it takes 70 days to fill up a position. It was 50 days earlier.
C: Thank you. Now I would take each step in the hiring process and analyze each step. Let me go through each. When we have a talent requirement, I believe the team manager will reach out to the talent management team. Now, if there are employees available inside the company, they will be allotted. Else, they will notify the talent acquisition team. Then the company would post the required notice on their website and shortlist candidates. Then interviews will happen, selected candidates are put into training/KT and then allotted to respective teams. Should I look into any step in particular? Or go through the entire process?
I: Okay. Take steps from the interview.
C: There are two departments - management and technical. Is this problem only for one section?
I: Yeah, consider only managers for now.
C: Okay. Who takes the interview of a candidate? As per my understanding, senior level managers take middle-level and middle level managers to interview junior levels.
I: That's correct.
C: Which level is experiencing this issue?
I: Middle and junior levels. Senior level will anyhow take a longer period.
C: Do we have any shortage of interviewers?
I: No.
C: Okay. Can I move on to the next step?
I: Yes.
C: After making an offer, are we seeing any delays? In giving out offer letters or in training?
I: No, we are not witnessing anything. Due to the interest of time, let us go to next case, Vaisakh.
C: Sure, thank you.
I am the CEO of a hospitality chain based in India. I want to build another hotel in a tier 2 city. I have narrowed it down to 5 different cities. What all different factors would I consider for choosing one amongst them?
[Please note that I stands for Interviewer and C stands for Candidate]
C: I would consider the following factors.
1. Is it a tourist center?
2. The average income of regional people.
3. Presence of business centers such as IT parks.
4. Presence of cricket, football, tennis, or any other stadiums
5. Presence of Railways/Airports/ NH.
I : Vaisakh, you have only considered demand-side factors. Please check supply-side factors too. Also, while you are at it. Please consider the general factors that could affect this decision.
C: Sorry. Please give me a minute to note down the factors. Supply-side factors could be -
1. Availability of labor. (For building the hotel)
2. Availability of water and other natural resources.
3. Well-connected logistics.
4. Ease of finding employees.
General factors could be –
1. Ease of doing business in that state.
2. Govt regulations.
3. Environmental laws.
4. Socio-cultural aspects of the region.
5. Legal issues.
I: Okay. Good. Now tell me at what number I should consider building it in one city.
C: Did a guestimate on breakeven taking parameters such as population, no. of tourists visited per year, the number of professionals/companies, rooms in the hotel, restaurant seats, and timings and slots.
I applied via Campus Placement
Your client is Sigma Automotive. They have $10bn revenue and are the current industry leaders. They have been facing growth challenges since the past couple of years. The slowdown is industry wide. The industry is moving towards a consolidation landscape and smart vehicles. The growth beyond core offering is the company’s current target.
A. Growth Objects: Historically, the company had 8-10 % growth. New target is 5%.
B. Geographical Split of Revenues: USA - 80%, Canada - 25%, Mexico - 5%.
C. Margin - 10% ($1bn).
D. Revenue split by Products: Heavy Vehicle sales - 70%, Light Vehicle sales - 30%.
E. Revenue by channels: Automotive sales - 75%, Services - 25%.
Sigma lags in EV innovation and advanced driving systems. Sigma is open to expand to new markets. The competition is following cross border M&A and the norm is traditional auto companies looking to acquire tech startups in other countries.
[Please note that I stands for Interviewer and C stands for Candidate]
C: I will just try to summarize all I could gather about the problem statement and please fill in if I missed anything.
(Repeated the Summary.)
I: Sounds good. The first question is what is the acquisition framework that you would follow for this firm.
C: I would follow the following steps:
1. Identification - Do an in-depth analysis of our requirements to have a clear understanding of what we need from the start up and the acquisition.
2. Market Research - Do extensive secondary research to identify the startups which fit our requirements.
3. Narrowing down options - Once we have a list of startups that fit our requirements, do a detailed analysis on the shortlisted companies about their financials and operations.
4.The work towards the mode.
I: This makes sense. Now you must meet with CEO, and you must give a summary of growth options. Please suggest.
C: I would suggest 3 growth options:
1. Organic growth - We have a strong foothold in the heavy vehicle market, and we can use the brand name to expand into the light vehicle market within USA.
2. Inorganic growth - We are already looking into options for technology start up acquisitions to drive innovations in EV and advanced driver systems.
3. Expanding into other continents - We have a good name and market in the USA, and we can explore international markets like Europe and Asia.
I: Okay now we will display three options of the startups on the screen and you tell us which one you go with and why.
C: I would go with option 3 since it is in Europe and Sigma is looking for expansion into other countries. Additionally, the revenues that the startup generates align with the company's target and they have a fair experience of working in the automotive industry.